Breaking on Thursday afternoon in Europe: Franco-German accord on the terms of a ‘financing plan’ for Greece has been announced by the French president’s office.
Via Reuters:
RTRS-SARKOZY AND MERKEL FIND AN ACCORD ON GREECE -ELYSEE
16:07 25Mar10 RTRS-FRANCO-GERMAN ACCORD ON GREECE CURRENTLY BEING SHOWN TO VAN ROMPUY -ELYSEE
16:07 25Mar10 RTRS-FRANCO-GERMAN ACCORD IS BASED ON EUROPEAN FRAMEWORK OF BILATERAL LOANS -ELYSEE
16:08 25Mar10 RTRS-FRANCO-GERMAN ACCORD INCLUDES PROVISION FOR IMF INVOLVEMENT -ELYSEE
16:10 25Mar10 RTRS-FINANCING PLAN TO BE MAJORITY EUROPEAN WITH NON-SUBSIDISED INTEREST RATES -ELYSEE
16:11 25Mar10 RTRS-FINANCING PLAN ONLY TO BE TRIGGERED IN CASE OF VERY SERIOUS PROBLEM WITH NO ALTERNATIVES SEEN-ELYSEE
More as we get it. For now, note that last caveat.
Update (16:25 GMT): …and confirmation on the German side, via Reuters:
16:25 25Mar10 RTRS – GERMAN GOVT OFFICIAL SAYS CONFIRMS AGREEMENT WITH FRANCE ON GREECE AID PLAN
16:33 25Mar10 RTRS – GERMAN GOVT OFFICIAL – EUROGROUP MUST AGREE UNANIMOUSLY TO AID PLAN BEING ACTIVATED IF IT IS NEEDED
Update (17:45 GMT): …and acceptance by Greece — and everyone else?
17:38 25Mar10 RTRS – GREEK GOVERNMENT SPOKESMAN SAYS FRANCO-GERMAN PLAN IS FULLY ACCEPTABLE
17:38 25Mar10 RTRS – GREEK GOVERNMENT SPOKESMAN SAYS AGREEMENT IS A MESSAGE OF STABILITY
17:43 25Mar10 RTRS – GREEK GOVERNMENT SPOKESMAN DECLINES TO PUT ANY VALUE ON SUPPORT PACKAGE
17:45 25Mar10 GREEK GOVERNMENT SPOKESMAN SAYS ALL EURO ZONE COUNTRIES HAVE AGREED ON PACKAGE
In fact, the number being put on the package so far is €22bn, for example via Le Figaro. Translation ours:
The agreement provided a budget of 22 billion euros “as a last resort,” said Berlin, which blocked discussions until Thursday morning. Clearly, assistance will be released in case of Athens’ inability to finance through markets normally.
A little bit of instant comment — one economist getting in touch to say this isn’t as euphoric as Paris first made out, and that we are indeed looking at a fairly harsh package for an emergency situation only.
In which case — let’s see if Greece can avoid paying 6 per cent-plus yields after this news.